Jan. 10 - Herbalife CEO Michael Johnson meets key investors in New York with his company in the crosshairs of two hedge fund titans and a report of government scrutiny. Conway G. Gittens reports.
The Power Player today is Herbalife chief executive officer Michael Johnson. Johnson is launching an all out defense of the nutritional supplements company, telling key investors at at an event Thursday his company is "legitimate." Herbalife's business model is at the center of a battle between two hedge fund titans. One, Daniel Loeb, is betting Herbalife will flourish. Loeb gave Herbalife a shot in the arm by buying a stake of more than 8 percent. The other, William Ackman, is betting it will falter. Ackman called the company's business model a "pyramid scheme", claiming distributors make much money by recruiting sellers than actually selling product. Aside from that drama, Herbalife's Johnson has yet another thing to worry about. The U.S. Securities and Exchange Commission is beginning an inquiry into company, according to the Wall Street Journal. Johnson's defense - doesn't seem to be going over well with investors - the stock is selling off.